Status downgrades at United Airlines also impact its own retirees

The rollout of the new United Airlines MileagePlus program for 2012 saw several tiers of elites getting their benefits slashed – from a 50% cut in bonus redeemable miles for many Premier Executive flyers to the loss of Economy Plus at the time of booking for Premiers – and the carrier also downgraded travel benefits for company retirees.

An article appeared in the Chicago Tribune earlier this month noting that management at United Continental will implement a new Pass Travel program for retirees come January 1, 2012. Previously, retirees of United received unlimited travel passes with a boarding priority higher than that of current employees. Over at Continental, their system gives preference to active employees.

As with most policies it seems of late, Continental’s system won out and current United retirees are angered. According to a retiree website, a complaint was filed with the EEOC (Equal Employment Opportunity Commission) alleging UAL has unfairly discriminated against active employees over 40 and retirees based on age, by retroactively taking away “no cost, earned benefits”. More on the age discrimination part in a moment, but first, here is United’s response to the Tribune:

The carrier also carefully calls retiree flight perks “a privilege,” but did throw them a bone and will provide eight one-way vacation passes per year with the higher boarding priority that trumps current employees. They will also still receive unlimited travel, but at the now lower boarding priority. Some critics are saying that’s not enough, stating they’re not getting the travel benefits promised to them at retirement. Some are further pointing to the fact they took pay and vacation cuts, reduced pensions, lost stock options and went through furloughs during United’s more turbulent years all because they knew they could travel upon retirement.

As a point of perspective, the article mentions American Airlines groups current and retired employees together and simply orders boarding priority by the time of check-in. I did a quick Google search, but didn’t find specifics for Delta… does anyone know how they handle retirees?

Now I’ll get to the part where I’ll likely get some hate comments & email. First, I’ll agree it hurts when a published benefit gets changed. We get it on the revenue side, too, and many of us have vested our flying in one carrier for years – 23 in my case.

Next I should mention that I worked for United for a time during the 1990s when employee ownership was around. I was a short-timer, so didn’t even come close to the minimum 10-years of service required before retiree benefits would kick in, nor did I opt-in to ownership (or maybe it was automatically deducted from my pay as I was in management, but don’t remember what happened to it when I left).

Now, though, let me offer my disagreement with the outrage. I think filing a complaint with the EEOC is unfounded, particularly from an age discrimination standpoint. United is still offering pass travel benefits to retirees, though the terms have changed, so I don’t understand the basis of the complaint.

Would this be akin to we customers filing a complaint with the Better Business Bureau over our benefit reductions? We have the freedom to switch carriers if we’re not happy, yes, but is there any part of the Pass Travel program that specifically calls out that retiree benefits would never change?

Also, while it’s free to the retiree, there is indeed a cost to the carrier for the extra fuel burn with the added weight and catering should it be consumed. When I worked for United, the forward cabins were only catered to planned load and it was common for employees to only get Business class if they listed for First and there weren’t enough meals.

I’m sure United wouldn’t have made this change if it went against any type of contract entered into with retirees, and if it had, they would likely grandfather in those with such a clause to be in compliance. Change is hard and while I understand the distaste to retirees, I think United is well within its right to modify that program and customer-focused programs as they see fit.

Comments

  1. The phrasing above implies that the travel benefits will no longer be unlimited for former employees. I do not believe that is the case at all. The main difference is in the ordering on the list for seats. UA used to give priority based on start date while CO gives preference to active employees over retirees. Yes, it is a change. Yes, the folks who are retired get bumped down the list. And, yes, the current employees get a benefit.

    Things change in life. Welcome to the real world.

    Oh, and this isn’t particularly new at all. It has been known for a few months at least. Dunno why the Trib decided that it was suddenly news. I do know that claiming it as age discrimination is ludicrous and, much like many other United Union effort, distracts the people they’re complaining to from doing their real jobs.

  2. It’s never fun to have the terms of the agreement changed after the fact. Just like no one likes to see their miles or status devalued after they have been earned.

    However, I think current employees deserve higher priority over retirees. They’re the ones working right now, whose morale directly affects customer satisfaction. Retirees may have put in more years, but they don’t work there anymore. Retiree benefits are a nice perk, but I’m in the camp that believes people need to provide for their own retirement.

  3. (legal point of view)
    actually this is a violation of retiree agreement with the employer…any changes to retiree benefits have to be agreed upon by both sides unless thru bankruptcy arbitration/mediation.

    I disagree with your comment “Would this be akin to we customers filing a complaint with the Better Business Bureau over our benefit reductions?”

    it is closer to retirees filing a complaint to Pension Guarantee Corp (PGC) or Dept of Labor when COdbaUA arbituary reduces their contributions to retiree health care expenses.

    Why do you think GM/Chrysler have to go thru bankruptcy to rid/reduce their union benefit liability?

    (non-legal portion)
    For Seth and Scottrick, I guess you favor changing the Social Security system to private accounts AND block-grants for Medicare and Mediaid.

    • I think Pass Travel falls outside the scope you’re referring to. Health insurance I might give to you, but even then, in the case of my parents who just reminded me today, they were screwed out of some of their “promised” health benefits later in life. I don’t think anything is contractual, especially pass travel. I’d imagine it to be “subject to change without notice,” as so many other things are.

  4. I think some recognition should be given to retires and their contribution to the airline. The CO system (and surviving plan) does not recognize contributions while placing retires after active, while at the same time the UA system unfairly retirees. A more fair system would be to grant retirees access to boarding based on their length of service rather than their hire date. In this manner a retiree who worked 25 years would board before the employee who has only worked 24 years, but after the employee that has worked 26 years but was hinted after the retiree.
    The CO management running the show do not appear to be interested in changing the existing CO policy, they should consider and implement the most fair system.

    • It’s a tough call. I actually favor CO’s system. Let the current employees board first… then the retirees. I know that’ll piss many off, but that’s just me.

  5. Delta’s pass-travel benefits provide retirees unlimited flights at a lower stand-by priority than active employees, but higher priority than friends and family (buddy) passes.

  6. I’m an active employee. What everyone fails to mention is that previously, only retirees with 25+ years were allowed to board at a higher priority and only for domestic flights.

    Now, ALL retirees on vacation passes are grouped with active employees so those retirees with more seniority are higher on the list for domestic and international flights. They’re actually coming out ahead.

    The group that really got screwed was CO management who had a higher boarding priority in exchange for lower salaries and attendance demands (ie, being back at your desk on Monday). Management can’t trip/shift trade, jumpseat, or otherwise find coverage. So now management employees have to compete with the 40 year part-time mail clerk, unaccompanied spouses, and retirees.

  7. I retired in 2011 after 35 years of service with UAL. Among other items, my retirement package included a “Retiree Pass Travel Benefits” brochure outlining the number of passes I was to receive per year. It also stated my date of hire would act as my boarding priority. It did not state that my date of hire would be reduced by one year with each new calendar year, as is the the case with the new program.

    This benefit (not privilege)was negotiated by our union. A side letter of agreement between AFA and the Company clearly spells out the benefit for retirees. This benefit was included in our contract pre-bankruptcy and did not change post bankruptcy in the then new contract.

    We saw our pension and work rules disseminated by the bankruptcy filing. But, at least could hang onto our retirement flying privileges, or so we were led to believe.

    We have healthcare for which I pay $300/month from my pension of $1300/month. However, imho the healthcare benefit will soon be a thing of the past when the Universal Health Care program takes effect. At that point, I believe, the company will jettison the reitree healthcare benefit altogether.

    Then what? At that point we will have lost everything we earned over decades of hard work.

    Keep in mind please, our retirement program was negotiated for and agreed upon by both parties.

    Thank you for reading.

  8. JR says.-I just found that my Employee Profile was changed the Board Date isn,t right according to me,I started with UAL in 11/14/94; so please I’d like to know why this change, and I retired from UAL in 2007. Thanks. JR.

  9. The new system completely ignores the mandatory age 60 retirement for pilots (at the time) by federal law. My hire date was 1967 and today my board date is 1981.
    So how about this scenario: Let’s say it’s 2025 say I’m 86 years old. I will have a boarding priority date of 1993. Along comes a pass rider with a hire date of 1992 who didn’t have a mandatory retire date and has just retired with 33 years of service. Their boarding priority date is 1992. As a bonus, they could conceivably be 54 years old if hired at 21.
    Just doesn’t seem right.

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